Supreme Court Takes Up Wal-Mart Bias Lawsuit

The largest sex discrimination lawsuit in U.S. history ran into a wall of doubt at the U.S. Supreme Court on Tuesday.

The class action lawsuit was filed against Wal-Mart 10 years ago on behalf of a half-dozen female workers and 1.5 million other women in similar situations. A federal judge, after hearing evidence, certified the class to proceed to trial, and Wal-Mart appealed all the way to the Supreme Court, contending that the case is simply too big to be handled in one fell swoop.

Standing on the steps of the Supreme Court, Betty Dukes, the lead plaintiff, said Wal-Mart's appeal is an attempt to "keep us out of court so the facts will not be presented to the public at large or before a sitting jury."

Those facts, say the plaintiffs, show that when the case was filed 10 years ago, women held two-thirds of the lowest-level hourly jobs and only one-third of the management jobs; and that women were paid on average $1.16 less per hour than men in the same jobs, despite having more seniority and higher performance ratings.

Wal-Mart, however, hotly disputes those statistics, contending that there is no pay difference between men and women at 90 percent of its stores. And the company points to what it repeatedly calls its "strong policy" against discrimination.

A Difference In Perception

Those themes played out at the oral argument on Tuesday, where there was a clear difference between the perceptions of the three female justices and the six male justices. Yet even the women seemed to have reservations about how such a large employment discrimination case could be handled.

When Wal-Mart's lawyer Theodore Boutrous contended that the lawsuit was unjustified in view of the company's clear policy against discrimination, the female justices put that argument to the test.

If a company "gets reports month after month showing that women are disproportionately passed over for promotion, and there is a pay gap between men and women doing the same job," asked Justice Ruth Bader Ginsburg, "isn't there some responsibility on the company to say: Is gender discrimination at work? And if it is, isn't there an obligation to stop it?"

Boutrous replied that the plaintiffs in this case had just "added up" all the statistics, some of which "mirror" national statistics.

But Justice Sonia Sotomayor seemed to reject that assertion: "I thought their expert ... found that the disparity was significantly much higher than the 10 competitors of Wal-Mart."

Ultimately, Wal-Mart may win, said Sotomayor, but the district court here found there was enough evidence to proceed to trial. So, "what's the standard that the court should use in upsetting that factual conclusion?" she asked.

Boutrous responded that the plaintiffs had failed to point to any policy that applied to all the plaintiffs and resulted in discrimination.

"I don't think that's quite fair," interjected Justice Elena Kagan. "I think their argument was that the common policy was one of complete subjectivity ... that allowed gender discrimination to come into all employment decisions."

Justice Ginsburg picked up that thread, noting that in the 1970s, women employees won a class action against AT&T after showing that women scored competitively for promotion on objective tests but disproportionately flunked the final and subjective "total person" test, largely because "all other things being equal, decision-makers tend to prefer people like themselves."

Said Ginsburg: "This sounds quite similar."

'Getting Whipsawed'

If the female justices seemed to dominate for the first half of the argument, the reverse was true in the second half, when Joseph Sellers, representing the female plaintiffs, stepped to the lectern.

"Is it true that Wal-Mart's pay disparity across the company was less than the national average?" asked Chief Justice John Roberts.

Sellers responded that the relevant comparison is between the pay for men and women at Wal-Mart, rather than between Wal-Mart and the general population.

Justice Anthony Kennedy: "It's not clear to me: What is the unlawful policy that Wal-Mart has adopted?"

Sellers said the policy was that Wal-Mart provided its managers with unchecked discretion.

"Your complaint faces in two directions," opined Kennedy. "No. 1, you said this is a culture where ... the headquarters knows everything that's going on. Then in the next breath, you say ... these supervisors have too much discretion. It seems to me there's an inconsistency there."

Justice Antonin Scalia chimed in: "I'm getting whipsawed here."

Sellers noted that a top Wal-Mart vice president had testified that the anti-discrimination policy was little more than lip service. And he pointed to training sessions for managers, where the standard reply as to why there are so few women in management is that men "are more aggressive in seeking advancement."

Scalia discounted this last piece of evidence, suggesting that all the company was saying was, "if you have an aggressive woman, promote her."

Determining Who Gets Back Pay

Ginsburg noted that at this stage of the litigation, the plaintiffs do not have to prove their case; they just have to show sufficient evidence to proceed to trial.

But, she added, "What seems to me is a very serious problem in this case is, how do you work out the back pay [if you win]?" After, all, she observed, "Didn't the district judge say that in awarding back pay, some would get a windfall and others would be uncompensated?"

Sellers replied that since Wal-Mart kept no records of its reasons for promotion or pay raises, the best way to determine back pay 10 years later is with a statistical formula based on the records that do exist for seniority and job evaluations.

Sotomayor questioned whether such a formula would deprive companies of a chance to show that an individual is not entitled to back pay.

"You're saying ... [we should] preclude them from doing anything but offering a mathematical model," she said.

Scalia added that if statistical models can replace witnesses and evidence, "we must have a pretty bad judicial system."

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